Post on 13-Jun-2020
DOES HORIZONTALLY INTEGRATED FIRMS
ENJOY COMPETITIVE ADVANTAGE IN THE
VALUE-CHAIN? EVIDENCE FROM THE
NIGERIAN FINANCIAL SECTOR Bamidele S. Adeleke
1, Vincent A. Onodugo
2 & Oluwaseun J. Akanji
3,
1,3 Department of Marketing, Ladoke Akintola University of Technology Ogbomoso. 2Department of Management, University of Nigeria, Enugu Campus
ABSTRACT
The financial sector of Nigeria has become more heightened and this has lead many financial institutions
rival firms pursing complementary alliances and strategic mergers. This study investigated the
competitive advantage of utilizing horizontal integration strategies in the Nigeria financial industry. By
adopting cross-sectional survey, data was collected through a self-administered structured questionnaire.
The target population of the study comprised of 2553 management staff of 12 selected financial
institutions in South-West, Nigeria. Sample size of 753 was derived. The hypotheses were tested at 0.05
level of significance. The findings revealed that competitive absorption have a positive effect (enhanced)
on the market coverage of financial institutions in Nigeria. Strategic alliances impacted positively on the
economies of scale of Nigeria’s financial institutions.. The results informed the study conclusion which
shows that merger, acquisition and strategic alliance among financial companies were the major
integration strategies utilized by financial firms in Nigeria. It was recommended that the management of
financial organizations and companies in Nigeria need to strive harder to manage their companies
effectively and not to dive into competitive merger and acquisition as the only survival strategy option
available to them. It was also advised that financial firms must consider full ownership as the most viable
method of integrating their services in a way that allows them to get instant access to industry- or
operations-specific knowledge and keep abreast with the pace of technological change
Keywords: Strategic Alliances; Competitive Absorption; Market Scope; Competitive Edge
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 143
IJOART Copyright © 2018 SciResPub.
1.0. INTRODUCTION
In the contemporary business times, fierce competition and increasing customer expectations
have encouraged suppliers, manufacturers and intermediaries to increasingly focus on delivery
speed, reliability, and flexibility (Boyer & Lewis, 2002; Flynn & Flynn, 2004). As the scope to
enhance these capabilities within the single organization is decreasing, many companies have
implemented strategies of integrating the business activities beyond the organization's boundary
(Bowersox, Closs & Stank, 1999). Firms are trying to align and coordinate the business
processes and activities of the vertical and horizontal networks to improve the overall
performance (Musso, 2009).
Every business has complex involvement with people, groups, and organizations in the society.
Some are intended and desired; others are unintentional and not desired. The people and
organizations, with which a business is involved, according to Post, Lawrence and Werber
(1999), have an interest in the decisions, actions, and practices of the firm. Customers, suppliers,
employees, owners, creditors and local communities are among those affected by the profitability
and economic success of the business. These they added, are critical to a firm‟s success or
failure.
Generally, organizations are set up by entrepreneurs to render services and deliver product output
to satisfy societal needs and to make profit (Nwidobie, 2013). In all human activities, there are
usually successes and failures. Businesses are no exception (Anyanwu & Agwor, 2015). In
periods of boom, businesses and individuals usually thrived in abundance and squad a mania, as
Nigeria experienced in the mid-seventies (Utomi, 2000). At such times, employment, production,
income and business generally were at peak levels (Adetona, 2004). During the peak period,
businesses do not think of means of survival and sustenance. Economic planners make
unrealistic projections and assumptions and business sector has access to cheap credits and
investment funds. Many Nigeria‟s organizations including financial institutions were highly
exceeding. However, when the boom days were over and recession took over, their doom days
came and business failure became inevitable as a result of adverse macroeconomic conditions.
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 144
IJOART Copyright © 2018 SciResPub.
The bottom line is that things and time had become bad for everyone and every organization.
Consequently, expansion is hindered; profits and operating earnings shrink and so on. Ogunbanjo
(2000), suggests that Nigeria situation in the late seventies was precarious because of economic
malaise, fueled by unfortunate political environment and inconsistent economic policies over the
years, thus, the economy started to experience a recession, which is a starting point of economic
downturn technically referred to as depression.
To survive in a hyper-competitive and downturn industry, companies have growth of sales and
profit as one of their major objectives. They don‟t want to stand still. Lack of growth drains the
company of new challenge, leads to loss of its entrepreneurial managers, and exposes it to
possible technological obsolescence (Kotler & Keller, 2014). In wanting growth, companies need
a growth strategy. They need to select from a whole set of possible investment directions those
that are most likely to produce the desired growth. Assessing growth opportunities involves
planning new businesses, downsizing, or terminating older businesses. Kotler and Armstrong
(2009) explain that the company‟s plans for existing businesses allow it to project total sales and
profits. If there is a gap between future desired sales and projected sales, corporate management
will have to develop or acquire new businesses to fill it (Brassington & Pettit, 2003).Murray
(2003) states that different types of growth strategies are available to a firm. Each firm has to
develop its own growth strategy according to its own characteristics and environment. According
to Ansoff (1965), the main growth strategies available to a firm include many a possibility
among which is the integration strategy.
Integration may be either vertical or horizontal. Perrault and McCarthy (2005) explain that
vertical integration may be backward or forward. Backward integration involves moving toward
the input of the present product and is aimed at moving lower on the production processes so that
the firm is able to supply its own raw materials or basic components. Thomas (2010), opines that
backward integration refers to the firm diversifying closer to the sources of raw materials in the
stages of production allowing a firm to control the quality of the supplies being purchased.
Forward integration, on the other hand, refers to the firm entering into the business of
distributing or selling of present product and moving upwards in the production/distribution
process towards the consumer (Hunger & Wheelen, 2009). It occurs when a firm moves closer to
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 145
IJOART Copyright © 2018 SciResPub.
the consumer in terms of production stages allowing a firm more control over how its products
are sold. The firm may also set up its own retail outlets for the sale of its own product.
Horizontal integration occurs when a firm adds parallel new products to the existing product line
or enters a parallel product market in addition to the existing product line. It may also occur
when a firm combines with a competing firm (Mugo, Minja & Njanja, 2015).
Within the economic and business management literature, there is a confusing profusion of
overlapping terminology and meanings related to supply chain, marketing channels, vertical
relationships and, more generally, business networks. Many contributions can be found referring
to an upstream (supply chain) perspective or a downstream (marketing channel) perspective. In
the case of marketing channel, the key contributions referred to the participating subjects and
their functions (Vaile, Grether & Cox, 1952; Alderson, 1957), the types of relationships and
flows (McCammon & Little, 1965; Rosenbloom, 1995), the boundaries of marketing channels,
including the final consumer (Bucklin, 1966), the various levels of interaction among channel
members, from single transactions to vertical integration (Webster, 1992), the different types of
channels based on the grade of integration among members (conventional, administered,
contractual, corporate) (McCammon, 1970), up to the concept of Vertical Marketing Systems
(McCammon,1970). There are several points of view by which vertical networks (supply
chains/marketing channels) can be observed.
In spite of their anticipated benefits, horizontal integration strategies still remain as an
untrammeled aspects of Nigerian corporate practices as the number of financial institutions and
businesses that have resorted to this form of reorganization for competitive advantage are much
fewer than the trend in the industrialized free market economies, where the concept dates back to
1880. It is against the backdrop of these challenges that prompted the crucial need to embark on
this study. Specifically, this study investigated the two following issues: (a) investigate the effect
of competitive absorption on the market coverage of financial institutions in Nigeria; and (b)
assess the impact of strategic alliances on the economies of scale of Nigeria‟s financial
institutions.
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 146
IJOART Copyright © 2018 SciResPub.
2.0. LITERATURE REVIEW ON HORIZONTAL INTEGRATION
Sudarsanam (2010) underlines that a number of firms in wide-ranging sectors such as utility,
electricity, banking, pharmaceuticals, insurance, oil and gas, automobiles, food and drinks, steel
and healthcare have merged with one another, in the recent years. Such mergers are defined as
horizontally related mergers. Where the firms selling the identical product merge, it is described
as a pure horizontal merger. “Where firms selling products that are not identical in terms of end
use but nevertheless share certain commonalities, such as technology, markets, marketing
channels, branding or knowledge base, merge, we refer to such mergers as related mergers.
For simplicity, Sudarsanam (2010) refers to the term horizontal merger as to both pure horizontal
mergers and related mergers of firms selling a range of similar products. Horizontal mergers
often qualify industries and markets whose products are generally in the mature or declining
stages of the production life cycle. These markets have a low overall growth rate, and firms have
accumulated production capacity that far exceeds the demand. This combination of low market
growth and excess capacity engenders difficulties on firms to attain cost efficiencies through
consolidating mergers. Such efficiencies may be achieved from scale, scope and learning
economies
Besanko et al. (2007) indicate that a firm‟s horizontal boundaries determine the quantities and
varieties of products and services that it produces. It refers to a merger of two or more firms
producing the same good under one consolidated firm (Chakravarty, 1998). Horizontal
boundaries vary obviously across industries and across the firms within them. The optimal
horizontal boundaries of the firms are appertaining crucially to economies of scale and scope.
Economies of scale and scope exist whenever large-scale production, distribution, or retail
operations have a cost advantage over smaller operations. “Economies of scale and scope not
only affect the sizes of the firms and the structure of markets, but they are also central to many
issues in business strategy” (Besanko et al., 2007). Economies of scale and scope are the essence
for merger and diversification strategies. They have an effect on entry and exit, pricing, and the
capability of the firm to protect its long-term sustainable advantage.
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 147
IJOART Copyright © 2018 SciResPub.
Horizontal integration strategies of take the dimensions of merger and acquisition (Anyanwu &
Agnor, 2015). Basically, mergers and acquisitions simply refer to the coming together of two or
more enterprises into a single entity. According to Ernest and Young (1994) mergers is defined
as the fusing of two or more companies whether voluntary or enforced. Mergers and acquisition
also refer to the aspect of corporate strategy, corporate finance management dealing with the
buying and selling, dividing and combining different companies and similar entities that can aid,
finance or help an enterprise to grow rapidly in its sector or location of origin or a new location
without creating a subsidiary. As a result of mergers and acquisition, two firms cooperate for the
purpose of achieving certain objectives which may be called a strategic alliance. Alashi (2003)
suggest that alliances are more flexible unions of which, two or more organization combined by
treaty agreement, memorandum of understanding (MOU) for a specific period or purpose.
Ahmed (2000) views mergers as a unification of previously separate companies into a single
corporation. Mergers and acquisition are usually a scheme that carefully planned to achieve a
synergistic effect (Oye, 2008). According to Olutola (1999), mergers and acquisition transaction
are often driven by regulatory economic and financial consideration. As in most business
decision, one or all parties to the amalgamation can perceive value in the linkage of the business
being combined or targeted. Moreover, that merger means any amalgamation of the undertakings
or any part of undertaking or interest of two or more companies (Ahmed, 2000).
Mergers and acquisitions can be express in the form of vertical/horizontal integrated and
conglomerate merger/take over. Vertical integration refers to the combination of two firms,
which are in the same industry but at different stages in the process of producing and selling of
products. This form of integration occurs when a manufacturing firm merged with another
company in the same industry and at the same level. The type of business combination between
Liver Brothers Plc and Lipton Tea is an example of acquisition. The conglomerate is used to
describe the type of merger between companies in related lines of business. The purpose of this
form of mergers and acquisition is for diversification (Oye, 2008).
The horizontal strategy of mergers and acquisition has so many advantages: According to Wyatt
(1993) when two firms merged together as one it will lead to the lowest cost of capital, for
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 148
IJOART Copyright © 2018 SciResPub.
instance, a big name as perceived by investors as financially balanced may raise funds at lower
cost. As a result of merging, the size will give the opportunity for rational diversification for the
purpose of risk reduction. Whenever two firms are merged together as one such merging will
lead to a large firm, therefore since large firms have a greater degree of market influence that
small one, hence this larger firm will have monopoly power. Large scale production may lead to
lower unit cost than small scale ones. Since the merging of two firms may lead to the elimination
of competition, there will be increased sales. The goodwill of the company taken over can be
enjoyed by the new owner. However, care has to be taken here so as to make sure that the taken
over company is not completely absorbed within the identity of the major company. This can be
overcome by using the names of both companies. This, in turn, should lead to savings in the
amount of money spent on fixed assets that are capital expenditures. The large company can
employ specialist, for all -important functions and this will result in a more efficient organization
According to Olutola, (1999), horizontal mergers and acquisition also have some disadvantages:
Whenever two companies or firms merge together it leads to a large company, as a result of this
amalgamation there will be a problem of personnel. The problem of integration occurs or arises
due to the fact that amalgamation does not stop at an agreement but the new company has to be
merged in such a way that it operates efficiently and contributes towards maximizing profits.
Variations could exist in the accounting systems of the various companies or firms and there is
always the problem of reconciliation. The terms of the agreement have to be reached at, although
it is not always easy since one party has to forfeit one thing or the other.
Golbe and White (1993) stated the following, as the types of Horizontal Strategies:
i. Direct Merger and Acquisitions: This occurs when firm takers over or merges with the
company in the same industry, and at the same level in that industry. This is a merger
with a direct completion. For example, if a retail food chain, bought retail food chain the
merger would be classified as horizontal integrated. (Okonkwo, 2004).
ii. Conglomerate Merger: In a conglomerate merger, two companies in unrelated fields of
business are combined. For example, an automobile parts manufacturer might acquire a
major producer of motion pictures. This is no increase concentration in any one field, as
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 149
IJOART Copyright © 2018 SciResPub.
would occur in horizontal merger and not new control of raw material, or outlets as
would in the vertical merger. (Okonkwo, 2004; Someye, 2008; Suddersanam, 2012).
iii. Concentric Merger: This involves firms which have different business operation patterns,
through divergent but highly related in production and distribution technologies. The
acquired company represents an extension of the product lines, market participation or
technologies of the acquiring. (Ayadi, 2007; Alao, 2010).
iv. Strategic Mergers: This form of the merger is a more recent development in the world of
business. It refers to a long-term strategic holding of the target firm. The purpose of this
is to create synergies in the long-run by increased market stone, broad customer base, and
corporate strength of the organization.
Frear (2001) says that it is probable that merger, acquisition and strategic alliances will change
the risk and return characteristic of the investment held by existing debt and equity holders in
each company. Supporting his argument, he had earlier argued that, provided that less than
perfect positive correlation is assumed between the net operating earnings of the merged
companies, merging can reduce the probability or bankruptcy or liquidation, and this led. He
thus stated the following as the advantages of Horizontal integration.
i. Operating Economics: This is the elimination of competition or duplication of
facilities, consolidation of marketing, purchase, financing and research efforts.
ii. Setter Management: To acquire an aggressive result oriented management, with a
view to contributing to company‟s overall progress.
iii. Gain Access to Liquidity/Finance: To gain access to the financial market, to improve
earnings per share, to improve the liquidity position of the company and entrance
listing on the stock exchange.
iv. Diversification: To enable the company to penetrate other markets, other than its
traditional catchment area with other goods. In addition, there is the inherent
advantage of spreading risk through diversification.
v. Product standardization: To enable the company to standardize products that can
effectively compete with others in the market.
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 150
IJOART Copyright © 2018 SciResPub.
vi. Assets Booster: To enable the enlarged company have increased level of total assets
that could be used as collateral for credit and also support the company‟s operations.
vii. Taxation: A company that has a lot of loss carry forward may want to acquire a
profitable company in order to be able to utilize its carry forward before it expires.
Also, to derive tax benefits, such as cessation and commencement of business.
viii. Personal Reasons: A closely held company (born by close associate or family).
Might have shareholders who want their company acquired by another that is quoted
in the stock exchanged. This to them may be an opportunity to dispose of part of, all
of their stock if the need arises for them to diversify their investment sometimes in
the future.
ix. Expansion: A company may be having difficulties in internal expansion or growth, it
may thus, find that merging or acquiring another company is the sure means of
achieving the desired growth rate.
Horizontal Strategy and Competitive Advantage
Frear (2001) states that the need to survive in a competitive business environment and at the
same time creates growth and development in this time of hard economic realities might also be
informed by:
i. The need to maximize the opportunities available to a company by replacing its
inefficient incompetent management.
ii. The need to achieve economies of scale, resulting in the combined output of both
enterprises.
iii. The need to select the production or market range of the company.
iv. The need to reduce competition, by acquiring a competitor as opportunity opens up
new market, heavy fixed cost and operating expenses
v. Sheer ambition on the part of management to achieve growth and market power of the
company.
In the area of the hard economy situation, as we have seen today, a company which faces a threat
of business failure has a possibility of been liquidated i.e. liquidation, Merger as an investment
decision can serve as an effective means of reducing this possibility. Here, Frear (2001) argues
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 151
IJOART Copyright © 2018 SciResPub.
along the line that it is probable that merger will change the risk and existing debt and equity
holders in each company.
The Concept of Competitive Absorption
Basically, mergers and acquisitions are forms of absorption. It simply refers to the coming
together of two or more enterprises into a single entity. According to Ernest and Young (1994)
mergers is defined as the fusing of two or more companies whether voluntary or enforced.
Mergers and acquisition also refers to the aspect of corporate strategy, corporate finance
management dealing with the buying and selling, dividing and combining different companies
and similar entities that can aid, finance or help an enterprise to grow rapidly in its sector or
location of origin or a new location without creating a subsidiary. As a result of mergers and
acquisition, two firms cooperate for the purpose of achieving certain objectives which may be
called a strategic alliance. Alashi (2003) suggest that alliances are more flexible unions of which,
two or more organization combined by treaty agreement, memorandum of understanding (MOU)
for a specific period or purpose.
Ahmed (2000) views mergers as a unification of previously separate companies into a single
corporation. Mergers and acquisition is usually a scheme that carefully planned to achieve a
synergistic effect (Oye, 2008). According to Olutola (1999) mergers and acquisition transaction
are often driven by regulatory economic and financial consideration. As in most business
decision, one or all parties to the amalgamation can perceive value in the linkage of the business
being combined or targeted. Moreover according to the Companies and Allied Matters Act
(CAMA) 2004, states that merger means any amalgamation of the undertakings or any part of
undertaking or interest of two or more companies (Ahmed, 2000).
Mergers and acquisitions can be express in the form of vertical/horizontal integrated and
conglomerate merger/take over. Vertical integration refers to the combination of two firms,
which are in the same industry but at different stages in the process of producing and selling of
products. This form of integration occurs when a manufacturing firm merged with another
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 152
IJOART Copyright © 2018 SciResPub.
company in the same industry and at the same level. The type of business combination between
Liver Brothers Plc and Lipton Tea is an example of acquisition. Conglomerate is used to describe
the type of merger between companies in related lines of business. The purpose of this form of
mergers and acquisition is for diversification (Oye, 2008).
Mergers and acquisition is one of the survival strategies of a business. As a result of mergers and
acquisition so many businesses in Nigeria has been expanded (Omole, 2004). Moreover, the
history of merger and acquisition activities in Nigeria can be traced to 1885-1 905. However,
Nigeria recorded the first merger in 1982, when United Nigeria Company Limited made a bid for
united Nigeria Life Assurance Company Limited. Between 1950s and early 1960s the economy
and political instability in Nigeria and the oil exploration of 1970 brought about the need for
merger and acquisition. According to Syng (2007), the history of merger and acquisition
activities in Nigeria cannot be separated from oil boom era. The oil boom crested wide spread
imbalance in the economy, instead of making the economy self-reliant it resulted to external
control.
Omole (2004) stated that the first mergers proposal in Nigeria came before the Securities and
Exchange Commission (SEC). He also observed that majority of the mergers and acquisitions in
Nigeria involve foreign companies although before 1968, there were no statutory rules
specifically regulating mergers and acquisition activities Nigeria. However, procedures and
modalities of achieving mergers and acquisitions were defined in section 1997 to 1999 of the
companies Act of 1968. Presently mergers and acquisitions have assumed an increasing
dimension in Nigeria. Mergers and acquisition also lead to vibrant and market competition.
Therefore mergers and acquisitions occur as a reaction to unexpected shocks to industries.
Mergers and acquisition has so many advantages. According to Wyatt (1993) when two firms
merged together as one it will lead to lowest cost of capital, for instance a big name as perceived
by investors as financially balanced, may raise funds at lower cost. As a result of merging, the
size will give the opportunity for rational diversification for the purpose of risk reduction.
Whenever two firms are merged together as one such merging will lead to a large firm, therefore
since large firms have a greater degree of market influence that small ones, hence this larger firm
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 153
IJOART Copyright © 2018 SciResPub.
will have monopoly power. Large scale production may lead to lower unit cost than small scale
ones. Since the merging of two firms may lead to elimination of competition, there will be
increased sales. The goodwill of the company taken over can be enjoyed by the new owner.
However care have to be taken here so as to make sure that the taken over company is not
completely absorbed within the identity of the major company. This can be overcome by using
the names of both companies. This in turn should lead to savings in the amount of money spent
on fixed assets that is capital expenditures. The large company can employ specialist, for all-
important functions and this will result to a more efficient organization.
According to Olutola, (1999), mergers and acquisition also have some disadvantages: Whenever
two companies or firms merge together it leads to a large company, as a result of this
amalgamation there will be problem of personnel. The problem of integration occurs or arises
due to the fact that amalgamation does not stop at agreement but the new company has to be
merged in such a way that it operates efficiently and contributes towards maximizing profits.
Variations could exist in the accounting systems of the various companies or firms and there is
always the problem of reconciliation. The terms of agreement have to be reached at, although it
is not always easy since one party has to forfeit one thing or the other.
The Concept of Strategic Alliances
Over the years, organizations have formed alliances with other parties in order to gain a better
position in local and global markets and create competitive ad-vantages (Kossyva &
Georgopoulos, 2011). As Drucker (1996) stated, “The greatest change in corporate culture, and
the way business is being conducted, may be accelerating growth of relationships based not on
ownership, but on partner-ship”.
As uncertainty increases, the ability of firms to adapt in their external environment and to remain
competitive is closely related to their capacity to innovate. Hence, it is crucial for firms to
continuously develop innovations in order to create value for their buyers and of course value for
their stakeholders. Furthermore, they have to be able to identify and explore business
opportunities, so as to exploit future competitive advantages (Kossyva, 2014). In order to
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 154
IJOART Copyright © 2018 SciResPub.
succeed in that, they need to accelerate the innovation process through more flexible forms of
collaboration such as alliance (Acharya 1999; Bengtsson & Kock, 2000).
Alliance is a dynamic process in which organizations seek competitive advantages arising from
both cooperation. Through this process organizations look for complementary partners, as a way
of promoting their own re-sources; transferring and creating knowledge; exploring
entrepreneurial opportunities, without losing sight of their own interests (Kossyva 2014). There-
fore, firms are called on to initiate collective actions with their competitors to create value in a
market and at the same time they compete to capture the created value individually (Bengtsson &
Kock, 2000).
Zamir, Sahar and Zafar (2014) explains that the global competition is increasing day by day, so
to improve productivity and market share strategic alliances are made which benefit firms. As a
result of global competition and the constantly growing demand for new technologies, strategic
alliances are becoming popular and important as its goal is to support the competitiveness of the
activities concerned. This is achieved through the utilization of each other‟s core competence and
specialization. The most common reasons why strategic alliances are formed are often market
related or technology related, or a combination of the two.
Strategic alliances are created to gain many benefits for the corporation and for many different
purposes. Some of them according to Elmuti and Kathawala, (2001) are listed below:
i. An alliance helps to enter new international markets by overcoming political, economic and
social barriers. Due to government policies and rules, it is difficult to enter new international
markets. Powerful motive to create alliances is to decrease entry barriers by joining forces
with other organizations.
ii. Home market competitive position is protected by alliances. Entering international markets
may affect domestic market but in international market, organization force foreign
competitors at home divert their resources away from expansion which protects the home
market.
iii. Alliances help in increasing distribution networks by acquiring new means of distribution.
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 155
IJOART Copyright © 2018 SciResPub.
iv. Alliances decrease the manufacturing costs, other costs and risks of the project, product or
services by sharing between the alliance partners.
v. Alliances in business helps to gain access to intangible assets like brand name, expertise
etc.
vi. Due to alliances potential rivals also cooperate which helps to decrease internal and external
uncertainties in environment.
vii. Strategic alliances help to broaden product line, services processes and fill product line gaps
in the current products. High cost and lack of technology may force a firm to seek a foreign
partner to fill their product lines.
viii. Strategic alliances allow companies to enter new markets and to attract many potential
customers which expand their market share. Organizations working in stagnant industries
enter alliances to grow its presence in emerging industries.
Theoretical Underpinnings
Theory of Economic of Scale and Scope
The origin of costs may have crucial inferences for industry structure and the behavior of the
companies. Besanko et al. (2007) denote that “the production process for specific good or service
exhibits economies of scale over a range of output when average cost declines over that range.”
Moreover, economies of scale exist if the firm attains unit-cost savings as it raises the production of
a given good or service. In order to achieve these scale economies, the associated costs, risks and
the extent of cost savings have to be taken into notice (Sudarsanam, 2010). Therefore, firms should
be conscious about diseconomies of scale, which arise from complexities of monitoring, diffusion
of control, the ineffectiveness of communication, and numerous layers of management. In addition
to these disadvantages, it also underlines the limits to economies of scale, in which beyond a certain
size, bigger is no longer better and may even lead to worse outcomes. The most important reasons
for these limits are; labor cost and firm size, conflicting out, spreading specialized resources too
thin, and incentive and bureaucracy effects. Moreover, economies of scale may be more crucial for
the manufacturing organizations, “since the high capital costs of the plant need to be recovered over
a high volume of output” (Johnson, Scholes, & Whittington. 2008).
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 156
IJOART Copyright © 2018 SciResPub.
The manufacturing sectors that have been generally important have been motor vehicles, chemicals,
and metals. In terms of distribution and marketing other industries such as drinks, tobacco, and
food, the scale economies would be crucial (Johnson et al. 2008). Economies of scope exist, if an
increase of production in the variety of goods and services saves the firm from the costs it bears.‟
Whereas economies of scale are usually defined in terms of declining average cost functions,
economies of scope are usually defined in terms of the relative total cost of producing a variety of
goods and services together in one firm versus separately in two or more firms.” In other words,
Panzar and Willig (1981) point out to the existence of economies of scope where it is less costly to
merge two or more product lines in one firm compared to supplying them separately.
Based on the definitions above, scope economies are available only for multi-product firms.
Certainly, both economies may be recognized by the increase in the output of individual products as
well as the total output of all the firm‟s products. The research on the extent of scope economies is
scarce, in contrast to the literature on scale economies. One possible explanation is that until
recently product costing did not allocate costs to the different products correctly, based on the
related activities. Activity-based costing (ABC) mitigates this issue; however, the problem of how
to compare these product costs in the merged firm with the costs on the similar products produced
separately by different companies still exists (Sudarsanam, 2010).
Learning Curve Model
The learning curve refers to advantages that flow from accumulating experience and know-how.
Sudarsanam (2010) specifies that the economy of learning comes to light when workers and
managers become more experienced and effective over time in using the available resources of the
firm and help decrease the cost of production. “The time required to do a job will decrease each
time the job is done, that the time per unit will decrease at a decreasing rate, and that the time
reduction will be predictable.” (Lindsey & Neeley, 2010) It is a function of cumulative output over
several periods, and increasing cumulative output raises the motivation to learn more efficient and
effective ways of producing each unit of the output for the managers and workers.
Horizontal mergers lead to the consequence of a sudden increase in the quantity of output when the
output of each merging firm is combined. While each firm has the opportunity to learn from the
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 157
IJOART Copyright © 2018 SciResPub.
experience of the other firm, this learning may not engender the cumulative output of the merged
entity to increase more. In the period subsequent the merger this output may increase, hence
creating an opportunity for further learning. However, if the output of the merged company is
already large, it is expected to have passed the minimum efficient learning scale (MELS) of
cumulative output (Sudarsanam, 2010)
METHODOLOGY
Cross-sectional survey method was adopted to see the opinion of the management staff of financial
institutions in the south-western zone concerning horizontal integrative strategies. A multi-stage
method was used in drawing the required population and this involves choosing the well known
highly performing deposit-money banks and insurance firms from the population frame. Out of a
population frame of twenty-two (22) number of registered deposit-money banks under CBN as at
year 2016 (i.e. Access Bank, CitiBank, Diamond Bank, EcoBank, Enterprise Bank, Fidelity Bank,
First Bank, FCMB, GTBank, Heritage Bank, Keystone Bank, Mainstreet Bank, SkyeBank, Stanbic
IBTC Bank, Standard Chartered Bank, Sterling Bank, SunTrust Bank, Union Bank, UBA, Unity
Bank, Wema Bank, Zenith Bank) and out of the population frame of fifteen (15) number
registered composite insurance firms under NAICOM as at year 2016 (i.e. AIICO Insurance,
Cornerstone Insurance, Axa Mansard Inrurance, IGI, Leadway Insurance, Niger Insurance, Ensure
Insurance, NICON Insurance, Goldlink Insurance, NSIA Insurance, Great Nigeria Insurance,
LASACO Assurance, Standard Alliaince Insurance, Royal Exchange Insurance) a total number of
seven (7) deposit-money banks and five (5) insurance institutions was selected. These institutions
were Fidelity Bank, GTBank, Access Bank, Diamond Bank, First Bank, Zenith Bank, United Bank,
AIICO Insurance, Leadway Assurance, Royal Exchange General Assurance, Cornerstone Insurance
and Niger Insurance. The total populations of management staff of the selected firms were 2553.
Sample size estimation was drawn with the use of Trek (2012) formula which gives a size of 753.
Convenience sampling technique was adopted to select the respondents from the population. The
rationale for this is that respondents at the level of management share equal access to the
information being looked for. A well-structured questionnaire was used for the data collection.
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 158
IJOART Copyright © 2018 SciResPub.
4.0. RESULTS AND DISCUSSION
A total of seven hundred and fifty three copies of questionnaire were administered to the
management staff of twelve selected financial institutions. Six hundred and ninety-nine copies of
the questionnaire were retrieved, which amounted to a 92.8% response rate. Six hundred and
ninety-nine copies of the questionnaire retrieved were found useable and a total of fifty four copies
of the questionnaire were not retrievable, which amounted to 7.2%. Based on the copies of
questionnaire retrieved, below is the demographic information showing the distribution based on
age gender and educational qualification.
The age distribution of the respondents are as follows: 18-24y (201-28.8%); 25-34y (227-325%);
35-44y (134-19.2%); 45-54y (77-11.0%); 55-64y (49-7.0%); while 65y and above (11-1.5%). The
result indicates that most of the respondents were between the ages 25-34 years (227) representing
32.5% of the total number of respondents. However, respondents within the age bracket above 65
years were the minority. This implies that most respondents in the Nigeria financial institutions are
mostly between the ages 25 to 34 years. This also shows that most of the respondents are young
adults who can independently give informed responses.
Data reveals fair sex distribution of the respondents: male (336-48.1%) and female (363-51.9%).
Despite the 3.8% difference between the two sex categories, data obtained represents a rich and
balanced opinion of both genders.
Information provided by respondents on educational qualification is as follows: PhD holders (3-
0.4%); MBA/MSc (231-33.1%); BSc/HND holders (305-43.6%); and ND/NCE holders (160-
22.9%). The degree programme results revealed that more of the respondents were BSc/HND
holders (305) followed by MBA/MSc holders 231 and the least were PhD holders with 3 numbers
of respondents.
The distribution of marital status reveals that married respondents were 221(31.6%) and single
respondents were 374 (53.5%). 81 (11.6%) of the respondents were separated while 23 (3.3%) were
divorcee. The implication of this is that most of the respondents were still unmarried while the least
were those that have divorced their spouses.
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 159
IJOART Copyright © 2018 SciResPub.
Testing of Hypotheses
Hypothesis One
In order to test the hypothesis on the whether competitive absorption affect the market coverage of
financial institutions in Nigeria, least square regression analysis was carried out and the results are as
presented in Table 4.1 below
HO1: Competitive absorption would affect negatively on the market coverage of financial institutions
in Nigeria
HA2: Competitive absorption would affect positively on the market coverage of financial institutions
in Nigeria.
Regression model: Y= α = βX+ µ…. (For all observations i, = 1, 2 …n)
Where Y = Market coverage
X = Competitive absorption
µ = error term of random variable
α = a constant amount
β = effect of X hypothesized to be positive
Hence, the regression (predict) equation will be Y = 108.011+1.212X
Table 4.1.1a:Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .511a .511 .663 29.15133
a. Predictors: (Constant), competitive absorption
Table 4.1.1b:ANOVAb
Model Sum of Squares Df Mean Square F Sig.
1 Regression 20171.151 1 20171.151 17.211 .002a
Residual 2712.049 668 928.350
Total 22883.200 669
a. Predictors: (Constant), competitive absorption
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 160
IJOART Copyright © 2018 SciResPub.
Table 4.1.1b:ANOVAb
Model Sum of Squares Df Mean Square F Sig.
1 Regression 20171.151 1 20171.151 17.211 .002a
Residual 2712.049 668 928.350
Total 22883.200 669
a. Predictors: (Constant), competitive absorption
b. Dependent Variable: market coverage
Table 4.1.1c: Coefficientsa
Model
Unstandardized Coefficients
Standardized
Coefficients
T Sig. B Std. Error Beta
1 (Constant) 108.011 47.849 3.113 .031
1.212 .416 .939 3.118 .045
a. Dependent Variable: market coverage
Table 4.1.1a, b & c above shows the results of the hypothesis two. The test shows the effect of
competitive absorption on the market coverage of financial institutions. The F-value is calculated
as the Mean Square Regression (20171.151) divided by the Mean Square Residual (928.350),
yielding F=17.211. From this results in the table is statistically significant (Sig =0.002). The
analysis revealed that competitive absorption accounted for 51.1% increased in the market
coverage (R = .0511, F (1, 698) = 17.211, p < .05).
Since the results of the ANOVA in table 4.1.1b show a significant level of 0.002, and F value of
17.211 being high, the alternate hypothesis which states that „competitive absorption would affect
positively on the market coverage of financial institutions in Nigeria‟ is therefore accepted, while the
null hypothesis which states competitive absorption would affect negatively on the market coverage of
financial institutions in Nigeria is rejected. Table 4.1.1 above shows the contributions of the
independent and mediating variables to the variance in the dependent variable and their levels of
significance.
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 161
IJOART Copyright © 2018 SciResPub.
Hypothesis Two
In order to test the hypothesis on the impact of strategic alliances on the economies of scale of
Nigeria‟s financial institutions, Z-test statistic analysis was carried out and the results are as presented
in Table 4.1.2 below.
HO2: Strategic alliances will have a negative impact on the economies of scale of Nigeria‟s financial
institutions
HA2: Strategic alliances will have a positive impact on the economies of scale of Nigeria‟s financial
institutions
Table 4.1.2a: One-Sample Statistics
N Mean Std. Deviation Std. Error Mean
Decisions on
Alliances &
Economies
of Scale
699 33.3100 28.34231 5.41121
Table 4.1.2b: One-Sample Z-Test
Test Value = 0
z df Sig. (2-tailed) Mean Difference
95% Confidence Interval of the
Difference
Lower Upper
Decisions on
Alliances &
Economies of
Scale
32.190 698 .004 33.3100 20.8800 54.1900
Source: SPSS Analysis of Field Data 2018
The information of the responses on the table 4.1.2 was used to test this hypothesis. The test was to
examine the impact of strategic alliances on the economies of scale of Nigeria‟s financial institutions.
In the first table, the mean value, S.D of respondent responses was given. The Z-test statistic value is
the degree of variation of the dependent variable which can be predicted by the independent variable.
The analysis revealed that a grand mean score of 33.31 and standard deviation of 28.34. In the second
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 162
IJOART Copyright © 2018 SciResPub.
table, the z-value was given as 32.190 with a significant value of 0.004. The significance of the Z
change was assessed and it was significant (0.004) as shown in table 4.1.2b. The significance levels of
the variables are less than 0.05 and the Z-value (32.190) is high and significant (0.004). Based on the
results revealed above it was justified that the alternative hypothesis should be accepted while the null
hypothesis should be rejected. It can therefore be concluded that strategic alliances impacted positively
on the economies of scale of Nigeria‟s financial institutions
Discussion of Findings
Finding one revealed that competitors absorption positively affected (i.e. increased) the market
coverage of financial institutions in Nigeria. The finding outcome from the descriptive statistics
revealed that most respondents were of the opinion that the financial organization enjoys increased
market share when it absorbs rival companies than when it‟s operating solely. The findings from the
descriptive statistics also showed that most respondents agreed by acquiring rival firms through
horizontal mergers, financial organization builds competencies and technology know-how in the
target markets. In addition, most of the respondents agreed that organizations continuing survival in
a hyper competitive environment are enhanced by absorbing its non-performing firms. Furthermore,
findings from the descriptive statistics indicated that most respondents agreed that the financial
organizations mitigate risks and expand business horizons through merger with rivals.
The result of this finding is in line with the work of Misund, Osmundsen, and Sikveland (2012),
Nwidobie (2013), Anyanwu and Agwor (2015) who recommended that the appropriate rival firms
acquisition have effect on the market position and size of firm. It is to be noted that all the three
studies were conducted within Nigeria environment. This justifies the similarities in the results.
This also extends the results of the study of Loertscher and Reisinger (2014), which indicated that
the competitive merger and absorption is very effective in becoming a market leader in a highly
volatile industry.
Although, the findings of some studies such as Lipczynski, Wilson & Goddard, (2005) supported
by Hamidi, Wennberg, and Berglund (2008) suggests that absorbing or taking ownership of
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 163
IJOART Copyright © 2018 SciResPub.
competing firms is averse to the development of the initiating organizations due to some of the
hidden problems. Hence, the outcomes of our results deviate from these findings. This study results
also dissociate from Colangelo (1995) finding who argued that mergers and acquisition have
brought nothing than issues and post-merger challenges. This study countered this stance based on
the findings from this research which suggests that using strategic competitive absorption is very
effective in stimulating on the market coverage of financial institutions in Nigeria. Though,
Colangelo (1995) reason may have been due to the fact that he used sophisticated methods and
domicile the work in western economies.
The result of finding two shows that strategic alliances impacted positively on the economies of
scale of Nigeria‟s financial institutions. The findings from the descriptive statistics showed that
most respondents agreed that the horizontal merger leads to coordinated effects by facilitating
information exchanges between financial firms at the same level of production. Similarly, the
findings from the descriptive statistics revealed that that most respondents agreed technological
transfers among financial firms facilitate the provision of more complex service packages by
financial organizations. Most respondents from the descriptive statistics were also of the negative
opinion that pricing collaboration by financial organizations promotes the efficiency of operations.
Furthermore, most of the respondents agreed that strategic partnership in the areas of knowledge
and expertise exchange enhances business innovativeness and information among financial firms
This shows that the there is high positive impact of strategic alliances on the economy of scale of
firms. This result agrees with the study of Gulati (1998) who was of the opinion that strategic
partnering does not only enhance the scale of economies of operation but also on the economies of
scope. The study is also consonant with the work of Cosh, Hughes, and Singh (1980) who asserts
that merger, alliances and coopetition in competitive industry facilitates technological transfers and
knowledge sharing. This study also aligns with the findings of the study of Leiblein & Miller
(2003) who reported that a business alliance in organizations is paramount in enjoying efficiency of
operations. This finding is also in agreement with the result of Nwidobie (2013), who opined that
alliances in terms of product encourage service delivery dependability and reliability. Generally, the
overall opinion is that merger and acquisition have a veritable role in building sustenance of
business.
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 164
IJOART Copyright © 2018 SciResPub.
On the contrary, studies such Arikan and Stulz (2011) have questioned the credibility of strategic
alliances and joint ventures arguing that new scenarios are constantly evolving and uncertainties
may be difficult to ascertain. The finding differs from that of Cai and Obara (2008) and Bhide
(2001) who criticized the alliances and cooperating methods asserting that the use of them has
received much challenges on the basis that it is highly volatile and more risky. However, despite the
pitfalls allured to strategic alliances, Mutura, Nyairo, Mwangi and Wambugu (2016) argued that
alliances are still a popular option for promoting healthy rivalry, because they are a tool for
conceptualization and sharing of synergies. The study is conducted in a developing economy
similar to Nigeria, hence one need not to question the match of the result when compared to that of
Arikan and Stulz (2011) which was done in a developed country.
5.0. CONCLUSIONS AND RECOMMENDATIONS
The study concluded that there were limited numbers of integration among most of the Nigerian
financial institutions. Banks and insurance companies in Nigeria have not fully exploited the
benefits of integration. Furthermore, the study concluded that merger, acquisition and strategic
alliances among companies as growth strategy in the Nigeria financial sector has yielded very
positive result. These were the only integration strategy utilized by financial firms in Nigeria.
Nigeria‟s financial organizations have seldom initiated other types of integration. This is because of
risks involved as well as the costliness. After a critical consideration of the findings and discussions
so far, the following recommendations are offered:
i. Though Nigeria financial companies are resorting to competitive mergers and acquisition as
the last hope for growth for market position, they should as well look at the negative effects of
merger and acquisition before using it as an option for growth. More so, the firms need to take
an-in-depth exploitation of other integration strategies which also offers long-run cost and
economies of scale benefits. It is necessary for the management of financial organizations and
companies in Nigeria to strive harder to manage their companies effectively and not to dive
into competitive merger and acquisition as the only survival strategy option available to them.
Other integration strategies need to be effectively exploited as well.
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 165
IJOART Copyright © 2018 SciResPub.
ii. During the next decade, the financial sector in Nigeria may certainly be marked by
disaggregation and reaggregation due to the described shifts in the sector‟s value chain. In
order to keep their status quo, financial firms must consider full ownership as the most viable
method of vertically integrating their services in a way that allows them to get instant access to
industry- or operations-specific knowledge and keep abreast with the pace of technological
change. Partial vertical integration through partnerships, alliances, and joint ventures provide
benefits to such firms only in the short term; the current partnerships among banks, internet
technology and broadband distribution firms are transitory steps meant to test business viability
in the newly industry segment. Therefore, in the long-term a shared asset ownership will hinder
the implementation of a consistent corporate strategy and full integration remains the sole
means of creating a future sustainable and non-imitable competitive advantage.
REFERENCES
Acharya, R. (1999). Matching collective and competitive strategies. Strategic Management Journal, 9(4),
375–385.
Adetona, A. (2004, January 11). Case studies of merger in Nigeria. Business Day, p. 9
Ahmed, A. (2000). Legal framework and procedures for mergers and acquisitions in Nigeria. SEC
sponsored symposium. 13, 10.
Alao, R.O. (2010) Mergers and Acquisition (M & As) In the Nigerian Banking Industry. An Advocate of
Three Mega Banks. European Journal of Social Sciences, 15(4), 21-44
Alashi, S.O. (2003). Banking Failure resolution: The Main Option. NDIC Quarterly, 3(2), 33-45.
Alderson, W. (1957), Marketing Behavior and Executive Action: A Functionalist Approach to Marketing
Theory, Homewood, Ill: Irwin
Ansoff, H.I. (1965). Corporation Strategy. New York: McGraw Hill.
Anyanwu, S. A. C. & Agwor, T. C. (2015). Impact of Mergers and Acquisitions on the Performance of
Manufacturing Firms in Nigeria. An International Multidisciplinary Journal, Ethiopia. 9(2), 156-
165.
Arikan, A.M. & Stulz, R.M. (2011).‘Corporate Acquisitions, Diversification, and the Firm’s Lifecycle.
Cambridge, MA: National Bureau of Economic Research
Ayadi, R. (2007): Assessing the Performance of Banking M &As in Europe: a New Conceptual Approach.
Brussels: Centre for European Policies Studies
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 166
IJOART Copyright © 2018 SciResPub.
Bengtsson, M. & Kock, S. (2000), “Cooperation and competition in relationships between competitors in
business networks”, Journal of Business & Industrial Marketing, 14(3), 178-194
Besanko, D. Dranove, D. Shanley, M. & Schaefer, S. (2007). Economics of Strategy (4th Ed.) USA:
McGraw-Hill
Bhide, O. (2001) Strategic Alliances in Firms. Journal of Management. 12(9), 167-174
Bowersox, D.J., Closs, C.C. & Stank. T.P. (1999). 21st Century Logistics: Making Supply Chain
Integration a Reality. Oak Brook, IL, USA: Council of Logistics Management.
Boyer, K.K. & Lewis, M.W. (2002). Competitive priorities: investigating the need for supply chain trade-
offs in operations strategy. Journal of Operations Management, 11(1), 9-20.
Brassington F. & Pettit S. (2003). Principles of Marketing (3rd Ed.) India: Prentice Hall Inc
Cai, H. & Obara, I. (2008). Horizontal integration on firm‟s reputation. A paper delivered at Brown
University, Stanford University, UC Berkeley
Chakravarty, S. R. (1998). Efficient Horizontal Mergers. Journal of Economic Theory. 82(1), 277-289.
Colangelo, G. (1995). Vertical vs. Horizontal Integration: Pre-emptive Merging. The Journal of Industrial
Economics. 43(3), 323-337
Cosh, A.; Hughes, A. & Singh, A. (1980). The Determinants and Effects of Mergers: an International
Comparison. Cambridge, MA: Oelgeschlager, Gun & Hanin
Drucker, P., (1996), Nonprofit prophet, The Alliance Analyst, available at: alliance-analyst.com
Elmuti, D. & Kathawala, Y. (2001). An overview of strategic alliances. Management Decision,(3), 205 –
218
Ernest, M. & Young, M. (1994). Mergers and acquisitions. Ontario: John Wiley and Sons Inc
Flynn, B.B. & Flynn. E.J. (2004). An exploratory study of the nature of cumulative capabilities. Journal
of Operations Management, 22(5), 439-458
Frear, J. (1990). Financial Management and Policy. London, International Edition, Cambridge University
Press.
Golbe D. & White, A. (1993): Basic Marketing Concepts, Decisions and Strategies. Englewood Cliffs,
N.J. USA: Prentice-Hall Inc
Gulati, R. (2008). „Alliance and Networks‟, Scientific Management Journal, 19(3), 293–317.
Hamidi, O. Wennberg, J. and Berglund, U. (2008) Acquisition and Taken over of Firms in A keen
industry. International Journal of Business. 9(4), 111-123
Hunger, D.J., & Wheelen, T.L. (2009). Essentials of strategic management (4th Ed.). USA: Pearson
Education
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 167
IJOART Copyright © 2018 SciResPub.
Johnson, G. Scholes, K. & Whittington, R. (2008). Exploring Corporate Strategy: Text & Cases.(8th
Ed.).USA: Prentice Hall.
Kossyva, D. & Georgopoulos, N. (2011) Co-opetition: a business strategy for SMEs in times of economic
crisis. International Journal of Business development. 17, 23-33
Kossyva, D. (2014), “Co-opetition Strategy: Fostering Innovation for Competitiveness and Growth”,
Paper Presented at the International Conference: Rethinking Business and Business Education in
the Age of Crisis, 20-22 October, Island of Chios, Greece.
Kotler, P. & Armstrong, G (2009). Principles of Marketing.(9th Ed.) India: Prentice Publishers Ltd.
Kotler, P. & Keller, K. (2014) Marketing Management.(14th Ed.) India: Pearson Publishers Ltd.
Leiblein, M.J., & Miller, D.J. (2003). An Empirical Examination of Transaction and Firm Level
Influences on the Vertical Boundaries of the Firm. Strategic Management Journal 24(9): 839-860
Lindsey, M. D. & Neeley, C. R. (2010). Building Learning Curve and Script Theory Knowledge with
Lego. Marketing Education Review. 20(1), 71-75
Lipczynski, J. Wilson, J. & Goddard, J. (2005). Industrial Organization: Competition, Strategy, Policy.
(2nd Ed.) USA: Pearson Education.
Loertscher, S. & Reisinger, M. (2014). Market Structure and the Competitive Effects of Vertical
Integration. The Centre for Economic studies and Info Conference paper on Applied
Microeconomics
McCammon, B.C. & Little, R.W. (1965).“Marketing Channels; Analytical Systems and Approaches”. In
Science in Marketing ed. Schwartz. New York: Wiley & Sons
McCammon, B.C. (1970). “Perspective for distribution programming”, in Vertical Marketing Systems. ed.
Bucklin L.P. Glenview Ill, Scott: Foresman & Co.
Misund, B. Osmundsen, P. & Sikveland, M. (2012). Vertical Integration and Valuation of International
Oil Companies. Journal of Business Management. 7(1), 23-33.
Mugo, M., Minja, D. & Njanja, L. (2015) The Corporate Growth Strategies Adopted by Local Family
Businesses in the Manufacturing Sector in Nairobi County, Kenya. European Journal of Business
and Innovation Research,3(1), 1-10
Musso, F. (2009) Relational Dynamics within Vertical Business Networks: The Need for A
Transdisciplinary Approach. International Journal of Business and Economics, 12(3), 17-28.
Mutura, J. Nyairo, N. Mwangi, M. & Wambugu, S. (2016). Analysis of Determinants of Vertical and
Horizontal Integration among Smallholder Dairy Farmers in Lower Central Kenya. International
Journal of Agricultural and Food Research [IJAFR]. 5(1), 1-13
Nwidobie B. M. (2013) Bank Mergers and Acquisition and Shareholders‟ Wealth Maximization in
Nigeria. Journal of Applied Finance & Banking, 3(3), 255-270
Ogunbanjo, T. (2000, March 18). Corporate restructuring and corporate tragedy. Business World p. 6
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 168
IJOART Copyright © 2018 SciResPub.
Okonkwo, M. (2000). Strategic Marketing in Banking: Does it Pay? Long Range Planning, Journal of
Strategic Marketing Management. 17(1), 23-31.
Olutola, O. M. (1999). Imperatives of Mergers and Acquisitions. A paper presented at Securities and
Exchange Commission (SEC) Central Area, Abuja: SEC
Omole, U. (2004). Regulating the takeover and mergers in Nigeria. The Guardian Newspaper, March 16
Pg. 32
Oye, A. (2008). Financial Management. Lagos: Ceemol Nigeria Ltd
Panzar, John C. & Willig, Robert D. (1981). Economies of Scope. American Economic Review. 71(2),
268-272
Perault E. & McCarthy, E.J. (2005). Basic Marketing: A Global Managerial Approach. (15th Ed.) USA:
McGraw-Hill Inc
Post, J.E., Lawrence, A.T. & Werber, J. (1999). Business and society: corporate strategy, public policy,
ethic. Singapore: McGraw-Hill
Rosenbloom, B. (1995). Marketing Channels: A Management View. Forth Worth, TX: The Dryden Press
Somoye R.O.C. (2008): The Performance of Commercial Banks in Post Consolidated Period in Nigeria:
an Empirical Review, European Journal of Economics, Finance and Administrative Science,
9(14), 23-44
Sudarsanam, S. (2010). Creating Value from Mergers and Acquisitions: The Challenges.(2nd Ed.) New
York, USA: The Free Press
Synge, R. (2007). Will liberalization work? New York: Harvard University Press
Thomas, J. (2010). Diversification strategy. Retrieved 25th August 2016 from
http://www.enotes.com/management-encyclopedia/diversification-strategy
Trek, J. (2004) Statistics for Beginners, USA: South-Western Cengage Learning.
Utomi, P. (2000, September 16). Strategy for growth survival. Business Times. p 8
Vaile, R.S., Grether, E.T. & Cox, R. (1952). Marketing in the American Economy. New York: Roland
Press
Webster, F.E. Jr. (1992). The changing role of marketing in the corporation. Journal of Marketing, 8(2),
56-71
Wyatt, A. (1993). Mergers and acquisition and pooling of interests. New York: Anderson and Co.
Zamir, Z., Sahar, A. & Zafar, F. (2014). Strategic Alliances; A Comparative Analysis of Successful
Alliances in Large and Medium Scale Enterprises around the World. Educational Research
International. 3(1), 25-39.
IJOART
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 169
IJOART Copyright © 2018 SciResPub.